3 Fintech Trends For Businesses To Capitalise On Now

Financial services including banking and insurance are not just facing changes to their operations, as in the past. This time, entire business models are facing disruption. Let's review the latest fintech trends and analyse their impact on businesses.

Technology has disrupted the financial services industry many times over the decades, but it can be argued that the current wave of technological transformation is perhaps the most disruptive ever. Let’s take a look at the leading fintech trends.

Firms need to respond to a building trend

It is clear that the pace of change is building, with over $13.8bn in venture capital due to back fintech in 2018, compared to a mere $3.8bn in 2013. To survive in the fintech landscape financial institutions need to know what these trends are as a necessary first step. Let’s take a look at the leading fintech trends.

Artificial intelligence and automation

With new branches such as deep learning AI is capable of tackling immensely complex problems. AI can save costs, improve customer service and create new opportunities for financial institutions:

AI is shaping insurance. Underwriting used to be a complex task that could only be undertaken by humans, but the ability of machine learning to process and learn from huge datasets may mean that human underwriters are soon no longer needed for any insurance lines that collect large datasets.

Robo-advisors driven by AI. In another Deloitte study, this time of the growing German robo-advisor market, the consultancy suggested that 4th generation robo-advisors driven by self-learning AI would soon provide highly customized financial advice. AI has the capability to bring robo-advisors far closer to the capabilities of human financial advisors.

Clearing and settlement. Transaction clearing and settlement is not an exciting business, but it is a costly operational issue for financial institutions. Blockchain offers a solution, with stock exchanges embracing blockchain: the Canadian Securities Exchange unveiled the country’s first platform for clearing and settling securities via blockchain and Australia’s ASX is also examining using blockchain to cut costs.

Data tokenization and advanced security measures

The cybersecurity threat is not retreating. PwC’s 2016 Global CEO survey found that 59% of financial services respondents were either extremely concerned or somewhat concerned by cybersecurity. A multi-faceted approach can include strategies around:

Data tokenization. Separating a customer’s personally identifiable information from the information required to complete a transaction can make it harder for criminals to commit fraud. Data tokenization can make card payments safer, for example. Tokenization can successfully isolate sensitive data without obstructing transactions.

Third party vendors. The ongoing adoption of cloud computing increases the points of exposure for financial institutions that use third-party providers for everything from KYC verification to in-office productivity software. Wise institutions must go to extreme lengths to vet the security practice of their partner vendors.

What else?

The sharing economy has impacted a range of industries including accommodation and transport, finance will not be left unaffected as decentralized asset ownership takes hold.

There is a coming regional shift too, with PwC suggesting that Asia is due to become a centre of innovative fintech, thanks to a growing Asian middle class.

Analytics and customer intelligence are also due to enjoy a boost in capability thanks to big data and business intelligence technologies. Financial institutions now have exponentially more data about their customers – and more computing tools to mine it.

Financial institutions are not alone

Your organisation does not need to go it alone when dealing with fintech challenges and in taking advantage of what fintech offers. While the world of technology is fast colliding with the world of finance it remains a world apart in many ways.

Financial institutions are better off partnering with a technology firm that is experienced in serving a broad range of finance businesses. ELEKS is a custom software development company with extensive expertise in the fintech domain.

Get in touch to learn how we can help your organisation make the most of fintech opportunities.

The breadth of knowledge and understanding that ELEKS has within its walls allows us to leverage that expertise to make superior deliverables for our customers. When you work with ELEKS, you are working with the top 1% of the aptitude and engineering excellence of the whole country.

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